Mortgage Market Update
by Tom on May 12, 2009
in Market Musings, Mortgage Rate Updates
Good morning! It’s time for a quick look at what’s going on in the markets today:
- It’s looking more and more like GM will have to enter bankruptcy to actually resolve their financial issues and from one article that I read last night, a GM bankruptcy is a 6 lane traffic jam compared to Chrysler’s 2 lane road with a yield sign on it. Going to be more complex than it was deemed to be originally. Complex isn’t good at this point.
- The markets are evaluating the information they have and are trying to determine whether the rally in the markets and the rally in the economy is a head fake or is a true sign of the bottom.
- The Fed’s announcement that the budget deficit will be higher than originally expected (and that was quite high) sent inflation concerns rising and rates drifting upward.
So what did rates do this morning? Nothing.
We’re at:
5.0% with .125 pts for a refi
4.75% with .125 pts for a purchase
both on a 30 year fixed and assuming a credit score of 740 or better.
My recommendation remains the same as before. Especially when it comes to refinance transactions, but both refis and purchases, I’d lock all loans. Why?
- While I believe there is a chance rates could go down, if you lock now, you’re conserving the savings from today’s rates without running the risk of losing that too.
- I think that due to inflation concerns and the lack of profit at Fannie Mae and Freddie Mac, the risk of higher rates is greater than the potential of lower rates.
I’ll continue to keep in touch, let me know if I can be of help.
Thanks!
Tom Vanderwell
